The Sad Reality Of Women-Owned Businesses (Video)

We have a lot of untapped human capital and potential in women in this country and we need to do more to encourage that.

By Angie Chang (Co-Founder & Editor-in-Chief, Women 2.0)

Senior Research Fellow Alicia Robb spells out the unfortunate reality of women-led businesses today in the latest animated Sketchbook video produced by the Kauffman Foundation.

She points out that a “sad truth is that women are not making as much progress as a lot of statistics that you see out there would lead you to believe,” explaining:

“You hear a lot about the number of women-owned businesses growing faster than firms overall.

But that’s just a reflection of a lower base and when the base is lower, it’s going to be easier to grow that number. If you look at the number of businesses with employees, it’s a much smaller fraction for women than for men.

But if you look at revenues or employment or payroll, they’re not actually growing faster than male-owned businesses they are growing slower. So we’re actually losing ground which is quite shocking given the gains we’ve made.

Women are just a lot less likely to get outside equity and capital. Women access about 5% of the equity capital each year and that’s a tiny amount given they own 30% of businesses.

Part of the challenge women face is they haven’t been part of the old boy’s network. There’s not many women on the financing side of venture capital and angel financing.

We have a lot of untapped human capital and potential in women in this country and we need to do more to encourage that.”

Angie Chang co-founded Women 2.0 in 2006. She currently serves as Editor-In-Chief of Women 2.0 and is working to mainstream women in high-growth, high-tech entrepreneurship. Previously, Angie held roles in product management and web UI design. In 2008, Angie launched Bay Area Girl Geek Dinners, asking that guys come as the “+1” for once. Angie holds a B.A. in English and Social Welfare from UC Berkeley. Follow her on Twitter at @thisgirlangie.